Over the next decade, an estimated 9 million homes owned by baby boomers are expected to be up for sale as they downsize, move into assisted living, or pass away. Escalating home values, retirement, and declining health are important issues faced by this generation of American homeowners, and that makes capitalizing on their most valuable asset a high priority. Will the selling of all of these homes create a “baby boomer tsunami” that floods the market or end up as a more gradual wave absorbed by demand? Could this be the solution to the ongoing housing shortage? How would the influx of such a large inventory affect housing prices and supply? To throw another variable into the mix, what happens if millennial and Gen Z buyers prefer newer builds as opposed to the older homes that many boomers are moving out of and have likely lived in for years? The real estate business must be prepared to deal with the likelihood of significant changes on the horizon.

Current housing inventory levels are extremely low, with approximately 500,000 dwellings nationwide. Just 80,000 new homes are being built throughout 50 states, with an average of 1500 per state. If you consider a state like California, which has 40 million people and nearly 30 million households, the number of properties needed must be even larger. Why is new home construction still lagging? What can be done to increase supply while meeting buyer demand? Are developers intentionally keeping the numbers low? How long will this supply-demand imbalance continue driving up prices? This week, Jeff’s guests include:

– Chris Piro (Searchlight Lending) discusses the use of AI in automating the underwriting process, the challenges of finding qualified borrowers, and the various lending products his company has to offer, including fix-and-flip loans, construction loans, and SBA loans.

– Tiffany Nguyen of Broker First Funding talks about their non-QM and agency loan products, their focus on fast closing times, the potential impact of the upcoming changes to the credit scoring system (FICO 10T), and the move from a tri-merge to a bi-merge credit report.